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Why Energizer Holdings at 8.22X P/E Might Be Your Next Value Pick
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Energizer Holdings Inc. (ENR - Free Report) appears to be an attractive value investment, trading at a forward 12-month price-to-earnings (P/E) ratio of 8.22, significantly lower compared with the industry’s average of 18.91. This indicates that ENR is undervalued relative to its industry peers, offering potential upside for investors.
ENR's strong Value Score of A further highlights its appeal as a potential investment, underscoring its affordability and attractiveness in terms of valuation. For value-focused investors, this combination of a low P/E ratio and high Value Score indicates the stock could deliver solid returns, provided the company maintains stable earnings growth and manages external risks effectively.
Image Source: Zacks Investment Research
Although the stock has gained only 3.9% over the past six months compared with the industry’s 10.1% growth, its closing price of $29.05 on Tuesday, which is 20.9% below its 52-week high of $36.72 on Nov. 14, 2023, represents an attractive entry point for investors looking for value.
The Zacks Consensus Estimate for earnings per share has been revised upward, reflecting the positive sentiment around Energizer. Over the past 30 days, analysts have increased their estimates for the current year by 2 cents to $3.27 per share and the next year by 3 cents to $3.54. These estimates indicate year-over-year growth of 5.8% and 8.4%, respectively.
Energizer is focused on strengthening brand loyalty through targeted pricing strategies and promotions, ensuring profitability while capturing greater market share. A key element of this approach is Project Momentum, an initiative aimed at cost savings and improving operational efficiencies. In the third quarter of fiscal 2024, Project Momentum delivered $14 million in savings, contributing to a 270-basis point improvement in the gross margin, which increased to 41.5%.
Energizer’s market expansion plans emphasize leveraging its global distribution network to accelerate growth in developing markets. The company is driving innovation across its product lines, introducing new offerings in categories such as portable power and auto care to meet evolving consumer demands. This focus on innovation is expected to further strengthen Energizer’s market position and support sustained growth.
A central pillar of Energizer’s financial strategy is debt reduction. Over the past two years, the company has repaid more than $430 million in debt, significantly lowering its leverage and enhancing financial stability. This disciplined approach has reduced financial risks and strengthened the balance sheet, positioning ENR for long-term success.
The Auto Care and Battery segments’ performance has been strong. The Auto Care segment experienced a 2.2% increase in revenues and a 470-basis point rise in the profit margin while the Battery segment saw profit growth of 6.2% in the fiscal third quarter. These results highlight Energizer's ability to effectively manage its diverse portfolio and drive performance across key business areas.
Image Source: Zacks Investment Research
Conclusion
Investors may find ENR stock appealing due to its strong value proposition, reflected in a significantly lower P/E ratio compared with its industry peers. This undervaluation, combined with a high Value Score, makes it an attractive option for those seeking long-term potential. Although Energizer stock has seen modest gains recently and remains below its highest point, upward revisions in earnings estimates indicate confidence in future performance.
ENR’s strategic initiatives, such as improving operational efficiency and expanding into new markets, further boost its growth potential. Moreover, its focus on product innovation and debt reduction strengthens its financial position while strong performance in key segments like Auto Care and Batteries demonstrates its ability to manage its portfolio effectively. The company currently sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
We have highlighted three other top-ranked stocks, namely Ingredion Incorporated (INGR - Free Report) , Edgewell Personal Care Co. (EPC - Free Report) and International Flavors & Fragrances (IFF - Free Report) .
Ingredion Incorporated, which serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries, has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
INGR has a trailing four-quarter earnings surprise of 11%, on average. The Zacks Consensus Estimate for INGR’s current financial year’s earnings indicates growth of 5.6% from the year-ago figure.
Edgewell manufactures and markets personal care products. It presently carries a Zacks Rank of 2. EPC has a trailing four-quarter average earnings surprise of 88.1%.
The Zacks Consensus Estimate for Edgewell’s current fiscal-year earnings and sales indicates growth of 17.2% and 1%, respectively, from the year-ago figures.
International Flavors & Fragrances is a global leader in high-value ingredients and solutions for food and beverage, home and personal care and health and wellness markets. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for current financial-year earnings indicates growth of 26.7% from the year-ago figure. IFF has a trailing four-quarter average earnings surprise of 15.6%.
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Why Energizer Holdings at 8.22X P/E Might Be Your Next Value Pick
Energizer Holdings Inc. (ENR - Free Report) appears to be an attractive value investment, trading at a forward 12-month price-to-earnings (P/E) ratio of 8.22, significantly lower compared with the industry’s average of 18.91. This indicates that ENR is undervalued relative to its industry peers, offering potential upside for investors.
ENR's strong Value Score of A further highlights its appeal as a potential investment, underscoring its affordability and attractiveness in terms of valuation. For value-focused investors, this combination of a low P/E ratio and high Value Score indicates the stock could deliver solid returns, provided the company maintains stable earnings growth and manages external risks effectively.
Image Source: Zacks Investment Research
Although the stock has gained only 3.9% over the past six months compared with the industry’s 10.1% growth, its closing price of $29.05 on Tuesday, which is 20.9% below its 52-week high of $36.72 on Nov. 14, 2023, represents an attractive entry point for investors looking for value.
The Zacks Consensus Estimate for earnings per share has been revised upward, reflecting the positive sentiment around Energizer. Over the past 30 days, analysts have increased their estimates for the current year by 2 cents to $3.27 per share and the next year by 3 cents to $3.54. These estimates indicate year-over-year growth of 5.8% and 8.4%, respectively.
ENR’s Strategic Initiatives Drive Efficiency & Growth
Energizer is focused on strengthening brand loyalty through targeted pricing strategies and promotions, ensuring profitability while capturing greater market share. A key element of this approach is Project Momentum, an initiative aimed at cost savings and improving operational efficiencies. In the third quarter of fiscal 2024, Project Momentum delivered $14 million in savings, contributing to a 270-basis point improvement in the gross margin, which increased to 41.5%.
Energizer’s market expansion plans emphasize leveraging its global distribution network to accelerate growth in developing markets. The company is driving innovation across its product lines, introducing new offerings in categories such as portable power and auto care to meet evolving consumer demands. This focus on innovation is expected to further strengthen Energizer’s market position and support sustained growth.
A central pillar of Energizer’s financial strategy is debt reduction. Over the past two years, the company has repaid more than $430 million in debt, significantly lowering its leverage and enhancing financial stability. This disciplined approach has reduced financial risks and strengthened the balance sheet, positioning ENR for long-term success.
The Auto Care and Battery segments’ performance has been strong. The Auto Care segment experienced a 2.2% increase in revenues and a 470-basis point rise in the profit margin while the Battery segment saw profit growth of 6.2% in the fiscal third quarter. These results highlight Energizer's ability to effectively manage its diverse portfolio and drive performance across key business areas.
Image Source: Zacks Investment Research
Conclusion
Investors may find ENR stock appealing due to its strong value proposition, reflected in a significantly lower P/E ratio compared with its industry peers. This undervaluation, combined with a high Value Score, makes it an attractive option for those seeking long-term potential. Although Energizer stock has seen modest gains recently and remains below its highest point, upward revisions in earnings estimates indicate confidence in future performance.
ENR’s strategic initiatives, such as improving operational efficiency and expanding into new markets, further boost its growth potential. Moreover, its focus on product innovation and debt reduction strengthens its financial position while strong performance in key segments like Auto Care and Batteries demonstrates its ability to manage its portfolio effectively. The company currently sports a Zacks Rank #1 (Strong Buy).
Other Key Picks
We have highlighted three other top-ranked stocks, namely Ingredion Incorporated (INGR - Free Report) , Edgewell Personal Care Co. (EPC - Free Report) and International Flavors & Fragrances (IFF - Free Report) .
Ingredion Incorporated, which serves diverse sectors in food, beverage, brewing, pharmaceuticals and other industries, has a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
INGR has a trailing four-quarter earnings surprise of 11%, on average. The Zacks Consensus Estimate for INGR’s current financial year’s earnings indicates growth of 5.6% from the year-ago figure.
Edgewell manufactures and markets personal care products. It presently carries a Zacks Rank of 2. EPC has a trailing four-quarter average earnings surprise of 88.1%.
The Zacks Consensus Estimate for Edgewell’s current fiscal-year earnings and sales indicates growth of 17.2% and 1%, respectively, from the year-ago figures.
International Flavors & Fragrances is a global leader in high-value ingredients and solutions for food and beverage, home and personal care and health and wellness markets. It has a Zacks Rank of 2 at present.
The Zacks Consensus Estimate for current financial-year earnings indicates growth of 26.7% from the year-ago figure. IFF has a trailing four-quarter average earnings surprise of 15.6%.